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Digest January-February

Computer Weekly looks back over January and February to report on what’s happening in the tech world

Computer Weekly looks at what has been happening in the tech world in January and February.

Tesco target of 300 online shops within one year

Tesco said it would expand its online shopping facility to 300 stores within a year, reaching 90% of the UK population. The move makes Tesco the world’s largest internet grocery retailer and legitimises the marketplace, forcing rivals such as Sainsbury and Asda to follow suit. By 2004, groceries are expected to be the most commonly bought item on the internet.

Microsoft gains mobile foothold with Ericsson

Microsoft signed a deal with Swedish mobile phone giant Ericsson, which gave it a foothold in the mobile web market, expected to take off this year. The deal was viewed as a defensive move by Microsoft in the face of the Symbian venture, which includes Nokia, Ericsson, Matsushita, Motorola and UK handheld company Psion. It could boost the prospects of Microsoft’s own Windows CE operating system, which is said to be too clunky for use with mobile phones.

Andersen and cap gemini set up online business units

Management consultancies Cap Gemini and Andersen Consulting have discovered the web, setting up new online business units to offer consulting services to bricks-and-mortar companies and dotcoms. The move brings them into line with other management giants such as KPMG, with the goal being to beat dedicated Web integrators such as US Web and Agency.com at their own game.

First internet music piracy convictions for frenchmen

Two French computer experts gained the dubious distinction of being the first Europeans to be convicted of music piracy over the internet. The move, brought by a string of major music labels including Sony, Island Records, and Warner Brothers, led to the pair being given three-month suspended jail sentences and an order to pay damages of around $15,000.

Amazon posts loss of $390m and lays off 150 staff

Amazon.com reported improved fourth quarter revenues and total sales for 1999 of $1.64bn, but it still lost $390m compared with a 1998 loss of $74m. A benchmark for all dotcom companies, it recently laid off 150 staff, the first in its history.

Online book sales now account for only half of Amazon’s business. Other lines of business include electronics, toys, software, CDs and power tools. Beyond.com also suffered a staff shakeout, getting rid of 20% of its workforce, as well as its chief executive.

Carmakers seek to expand online supply chains

Carmakers Ford and General Motors both bid to add other auto giants to their respective online supply chain networks. The pair – GM with Commerce One, and Ford with Oracle – are both touting for business with Toyota, Nissan, and Honda in a bid for greater cost savings. The two rival networks are expected to generate business worth hundreds of billions of dollars. Ford said it had saved $10m on a $75m purchase the first time it used the system.

Vodafone takeover shows mobile future

Vodafone won the battle for mobile phone rival Mannesmann after an acrimonious three-month battle, which had both companies claiming they offered the best prospects for mobile Internet usage. Vodafone’s late deal with French mobile group Vivendi to set up a mobile Net portal is believed to have clinched the bid. A tie-up with Vivendi was one of Mannesmann’s goals to stay independent. The takeover, one of the largest in history, emphasises the growing importance of mobile e-business.

Barclays and First-e admit online banking problems

Online banks Barclays and First-e face problems in delivering robust systems for their account holders. Barclays, which has over 500,000 customers online, admits its customers have problems tracking payments from their accounts, while First-e said it was trying to solve paying-in problems for account holders. Paper cheques have to be paid into central accounts before being credited into individual accounts, leading to delays.

AOL-Time Warner deal flags importance of content

AOL and Time Warner concluded the largest and most important merger of the Internet era to date, worth $156.15bn. The deal, which saw an internet service provider take over one of the most famous names in entertainment history, created a content-rich giant with market capitalisation of over $350bn, with major implications for other entertainment and media companies. The future is likely to see a shakeout as rivals struggle to merge their operations in a bid to compete.

US encryption product export made easier

The US government unveiled simplified procedures for the export of encryption software. The move, which follows a string of consultation procedures with the US software industry and a number of false dawns, is likely to mean stronger encrypted products from US software giants will be available in Europe. Critics insist the procedures for the export of software, once categorised as a weapon, are still too bureaucratic and can still be made easier.

Irish firm's US buy-out gains it large customers

Irish security firm Baltimore Technologies bought US e-commerce specialist GTE Cybertrust to create a US hub to service customers. Baltimore, one of the leaders in public key infrastructure technology – a means of improving security using digital certificates - will gain clients such as American Express and Deutsche Telekom from the deal. It is the first in an expected consolidation of the security sector.

EU aims to smooth way for e-trade with seven directives

The European Commission said it wants to push through up to seven legal directives which it hopes will enable European businesses to catch up on their US counterparts. Directives include electronic commerce, distance selling, and electronic money. The rush to get legislation enacted may still be thwarted by national interests, which are likely to hold up progress. IT and e-commerce directors will need to monitor developments to ensure that their ventures comply with legislation.

Levi Strauss butts out of online business

US jeans maker Levi Strauss carried out its threat to axe selling its clothing from its own online store, and leave it to other retailers like JC Penney and Macys.com. The $6bn retailer, which had seen its revenues slide since 1996 failed to generate sales to offset the costs necessary to maintain its online presence. Analysts warned that the cultural challenge of running an online business is formidable, and many incumbent businesses, especially in times of turmoil, are going to retrench from their online activities.

EU commission Moves towards .eu domain name

The European Commission also signalled a desire to push for the adoption of a .eu internet domain name. The move, which has not yet been backed by the UK government, follows a view from Brussels that the rush to adopt the .com domain name adopted by many Internet companies means that many European companies would need a new domain space. European institutions such as the Commission and the Parliament are likely to be first adopters of the suffix, but many UK businesses may resist the EC move.

BSkyB to provide Vodafone mobile news content

BSkyB and Vodafone are set to launch an internet-based news service for Vodafone’s mobile subscribers. The deal is part of Vodafone’s plans to develop a mobile internet portal across its networks around the world. It has already signed a deal to offer BBC News to its subscribers.

UPS sets up e-business arm

US parcels group UPS set up a subsidiary to test and launch new businesses to enable it to compete with rival Federal Express. FedEx recently launched a home delivery service to compete with UPS. UPS’s eVentures division's first task is likely to be expanding its logistics provision for small and medium-sized businesses.

EMI tie-up will reap huge global market share

Music group EMI tied up a $20bn deal to place its music assets in new venture with Time Warner. The deal, which occurred shortly after the huge deal between AOL and Time Warner, creates a music operation with a global market share approaching 25%. The link-up, and the AOL-Time Warner tie-up demonstrates that content has become a key commodity capable of driving through major mergers and joint ventures.

US firm intercepted Amazon email to gain intelligence

A US company said it will plead guilty to intercepting e-mail messages from online bookstore Amazon.com. Alibris, a rare book dealer based in Emeryville in California, was said to have intercepted over 4,000 email messages in an attempt to gain market intelligence. The company, which admitted violating the US Electronic Communications Privacy Act said the interceptions were innocent and possible because Alibris provided an e-mail service for book dealers.

Business-to-business predictions bullish

Research group Gartner has predicted the business-to-business (B2B) e-commerce market will grow at aggressive rates to reach $7.29tn by 2004 from $145bn in 1999 – or 7% of the forecasted $105tn total global sales transactions. The catalyst for B2B e-commerce is activity among “e-market makers” – organisations that develop a B2B, internet-based marketplace within a particular industry, geographic region or affinity group. Among the best-known e-market makers are Chemdex, VerticalNet, Altra Energy Technologies, Paper Exchange, Instill, PlasticsNet and Commerce One’s Marketsite.net.

Greenwich Electronic Time hopes for approval

The Interactive Media in Retail Group gained UK government backing for the creation of a new time-stamping facility for Internet transactions. Greenwich Electronic Time (GeT) had the backing of UK e-envoy Alex Allan, and a string of UK businesses, including DHL and BT. The plan, which complements a similar Net time scheme by UK Internet network Link, and offers downloadable Net time ‘tools’, hopes to gain broad international approval.

Denial attacks rise

Hacker attacks knocked out a string of the web’s best-known sites, triggering new fears about security. Yahoo, CNN, Amazon and Buy.com all suffered “denial of service attacks”, where servers are bombarded with so many messages from thousands of infiltrated PCs that they are unable to cope with any more incoming messages. Suspects have included a hacker ring, or even teenagers.

Chemicals giant dupont gets online with chemdex

US chemicals group Dupont and business-to-business exchange operator Chemdex set up a joint company to sell industrial equipment over the Net. The venture, called Industria, marks the latest step in Dupont's electronic commerce strategy, which has so far included ventures in petrochemicals, medicine, steel, and intellectual property. The venture, which has venture funding of over $30m, demonstrates the need for a variety of options in a traditional company’s e-commerce plans.

Brown and BT clash over uk internet access costs

Chancellor Gordon Brown clashed with BT following his call for a halving in UK internet access costs and a speedier unbundling of the local loop. Brown wants BT to open up its cable network sooner than the July 2001 deadline set by telecoms regulator Oftel, and said Internet access costs should match the US by 2002. Both moves could provide a tremendous boost to the UK e-business economy. A recent survey from Internet consultancy Durlacher found that web use would triple if unmetered access was introduced in the UK.

Xhtml eases e-business

Doing business online could become a lot easier soon, following the World Wide Web Consortium’s decision to back the new XHTML specification. XHTML is essentially an extensible markup language (XML) rewrite of HTML 4.0. Web sites written in HTML have to be overhauled each time they need to assimilate with data from outside, but XHTML creates a “middle-ground” for data exchange. XHTML is backwards compatible with documents created using HTML 4.0 so it will be supported by major browsers.

This was last published in February 2000

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